Response to interferon in patients infected with HCV has been variable. Recent studies suggested a region, termed IFN sensitivity determining region (ISDR) in the HCV NS5A gene, that are associated with resistance to interferon. The NS5A has also been shown to be a phosphoprotein, probably playing an important role in viral replication and viral-host interaction. Because of the functional importance of NS5A, our laboratory is conducting experiments to characterize its function and identify cellular factors that are the functional targets of this HCV gene product. Using the yeast two hybrid system, several independent clones that interact specifically with NS5A have been identified. Many of these clones encode proteins with SH3 and/or SH3 binding domains and some of them are known genes with putative signal transduction functions. Interactions of these clones with NS5A were also confirmed by the in vitro GST-fusion binding assay as well as co-immunoprecipitation experiment in vivo. It is interesting to note that several proline-rich sequences (similar to SH3 binding domain) are present and flank the ISDR region in NS5A. Our findings are consistent with a recent report that NS5A interacts with Grb2, a SH2/SH3 adaptor molecule in signal transduction. Experiments are under way to address the functional significance of these interactions. Effort is also being initiated to evaluate the clinical significance of sequence variations in NS5A. Furthermore, the E2 protein has recently been shown to interact with and inhibit PKR (Science 1999; 285:107). The interacting sequences on E2 (PePHD) are variable among the HCV genotypes, possibly underlying the genotypic difference in interferon response. We studied the pretreatment HCV sequence of 34 patients treated with interferon monotherapy. All genotype 1 samples regardless of response had significant homology with the PKR phosphorylation site suggesting resistance to interferon. Three of the six patients with genotype 2 and 3 as well as two of the three with unknown genotype had sequences which varied from the PKR suggesting sensitivity to interferon. Mutations which varied at the 3rd and 9th amino acid position of the PePHD occurred exclusively in sustained responders. Our data suggest that the PePHD plays a role in determining interferon sensitivity although the final response is probably multifactorial. Detailed characterization of this virus-cell interaction and correlation to clinical disease may contribute to our understanding of HCV replication and mechanisms of hepatocellular injury.